Sebi Bars Launch Of New Derivative Contracts In Seven Commodities. Know Why

For running contracts, the market regulator has said no new positions would be allowed in these commodities

The directions will be applicable for one year, the Sebi statement says. Image: Getty

New Delhi: The Centre has suspended trading in futures contracts of some agricultural commodities for one year to rein in inflation. The Securities and Exchange Board of India (Sebi) on Monday asked commodity exchanges not to launch futures contracts of soybean, crude palm oil, wheat, rice, chickpea, green gram, rapeseed, and mustard for one year, according to Reuters. 

For running contracts, the market regulator has said no new positions would be allowed in these commodities, according to a Sebi order. The latest directive will come into force with immediate effect, according to a release. The directions will be applicable for one year, the Sebi statement added.

The Consumer Price Index (CPI) accelerated to 4.91 percent in November from 4.48 percent in October as food prices rose, offsetting the effect of a cut in fuel taxes, data released by the statistics department on Monday showed. A Reuters survey of economists expected inflation to be higher at 5.10 percent.

 Consumer price inflation didn’t witness any relief despite cuts in excise duty by the government and states which did not provide much relief in tempering inflation. Analysts believe that weakening domestic currency may also add price pressure at the retail level.

Meanwhile wholesale inflation for November also rose 14.23 per cent from 12.54 per cent a month ago. This was the eight consecutive month in which it stayed at a double digit level.

Food prices, which contribute to nearly half of CPI, rose 1.87 per cent in November from 0.85per cent in the previous month, the data showed.  In the December bi-monthly meeting, RBI retained the retail inflation forecast for the fiscal year at 5.3 per cent.